Boston Beer (SAM) Q4 Earnings Miss Estimates, Stock Down
Zacks Investment Research | Feb 19, 2020 09:55PM ET
The Boston Beer Company, Inc. (NYSE:SAM) reported fourth-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues topped. Revenue gains from robust shipments and strong depletions were more than offset by lower gross margin, and higher advertising, promotional and selling costs.
Boston Beer’s fourth-quarter adjusted earnings of $1.24 per share missed the Zacks Consensus Estimate of $1.42. Further, the bottom line declined 33.3% from $1.86 earned in the year-ago period mainly due to lower gross margin coupled with higher advertising, promotional and selling costs. This was partly offset by higher revenues. On a GAAP basis, earnings were $1.12 per share in the reported quarter.
Shares of Boston Beer plummeted 10.7% in the after-hours session on Feb 19 due to the dismal bottom-line performance. However, the Zacks Rank #1 (Strong Buy) stock has gained 3.3% year to date against the industry ’s 5.3% decline.
Net revenues advanced 33.8% year over year to $301.3 million and outpaced the Zacks Consensus Estimate of $277.1 million. Excluding excise taxes, the top line rose 33.9% year over year to $320.2 million.
Robust top-line performance can primarily be attributed to a 31.7% improvement in shipments to nearly 1.3 million barrels. Excluding the addition of the Dogfish Head brands, beginning Jul 3, 2019, shipments increased 25.6%. Depletions grew 25%, including a 19% rise from Boston Beer legacy brands and 6% from the addition of Dogfish Head brands. Notably, shipments reflected a higher growth rate than depletions in the quarter, which resulted in higher distributor inventory levels as of Dec 28, 2019.
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